In this video here, we're going to be doing an update
on my very small Fundrise investment back in July of 2018.
I learned about this real estate investing platform.
I was a little bit skeptical at first.
There are some reasons that investors are a bit cautious
with these crowdfunded real estate investing platforms.
into this account.
I have now had this account open here
for about eight months.
I wanted to share with you guys a progress update,
what has happened with this account.
I do plan on adding some more money to this account
now that I have seen a lot about half a year of progress
with this account and I have a better understanding
of these crowdfunded real estate investing platforms.
Now I've done a lot of research on Fundrise.
I have a very in-depth review I will link up
down on the description below
that talks a lot about Fundrise
and what you need to understand as an investor.
But the main two points that I think you need to know
as a Fundrise investor is number one,
it is a long-term investment.
Real estate is inherently a long-term
and a liquid investment, that's gonna be point number two,
and so, you don't put money in Fundrise
if you're going to want to take it out in a week
or a month or a year.
Fundrise is meant for people
with a five-plus-year time horizon in my opinion.
If you're looking to be a long-term investor
and you're looking to diversify assets
away from the stock market
and you don't necessarily want to go out there
and be a physical real estate investor, that is the niche
that these crowdfunded real estate investing platforms
fall into and the need that they are capturing there.
The second point I want to make here
that you need to understand as an investor
is that liquidity is not guaranteed.
Your money is being invested in real estate projects.
If all of a sudden, you had a large investment in Fundrise
and you said okay, I want to cash out tomorrow,
they cannot guarantee the fact
that they can have liquidity and the ability to do that
because your money is going into
actual real estate projects.
Now a lot of people might be scared by that and saying,
"Okay, if my money is tied up
"and I can't get immediate access to it,
"I don't want to be any part of that."
That is totally fine.
It's certainly not the investment for you.
But if you understand the fact that your money
is being invested in real estate projects
and it would take time to liquidate,
a lot of people are understanding of that
and that may not be something that is a con for you
when it comes to investing in Fundrise.
That being said, it is an interesting way
to get exposure to an asset class
that was traditionally reserved to high-net-worth investors
and that is these private real estate investments.
Looking at the returns over the past couple of years,
they've had very promising returns.
It's important to remember
that past results do not guarantee a similar outcome.
Even the returns that I've seen with my Fundrise investment
or that they're showing on their website,
they are not guaranteed in the future.
We are looking at returns here
in a very hot real estate market.
So, the real test will be when we see a downturn
with the real estate market
and seeing what kind of returns
Fundrise investors are seeing.
That being said, let's jump into my computer here
and take a look at my Fundrise investment.
If you guys do decide you want to learn more
about Fundrise, I have the review article down below.
If you do want to sign up, I have an affiliate link
in the description below.
You guys don't have to use it if you don't want to,
but it certainly helps me out.
It helps to support my channel
and allows me to make more videos like this.
Here is the dashboard here from my Fundrise investment.
My $1,000 investment in June of 2018 has grown to $1,048.70.
I've earned about a 5% return in that time period.
I'm in the balanced investing plan,
which is a combination of both growth and income.
So, it's both properties that are producing cashflow
as well as equity investments in growth opportunities
where they're trying to buy and fix up properties
in areas that are seeing higher than average growth
in terms of population.
As you could see here, with Fundrise,
you are seeing regular growth in the account.
These jumps here are when dividends were paid.
I've been paid two dividends.
The quarter one dividends should be coming up here
relatively soon, which will probably push me
into the six to 7% return category here since June of 2018.
Scrolling down here, you can see that if you take a look
at the projects, it gives you an update on any projects
that have been added to your portfolio.
I get these emails on a regular basis as well.
I'm currently invested in 129 active products.
This right here is their rating
in terms of the quality of that debt
and the projected return from that.
That gives you an idea of the risk/reward profile.
As you can see here,
there's a 40% debt, 60% equity portfolio.
It's some properties that are producing cashflow,
which is more like a dividend stock,
and some equity investments and growth opportunities,
which is like a growth stock.
And then if you take a look here at the dividends,
you can see that I earned dividend.
The first one was quarter three of 2018,
a dividend of 10.16.
Actually I just recently earned a dividend.
Next one will probably around April.
We recently had a dividend here on January ninth of 9.53.
Another thing to remember here
is that dividends are not guaranteed with Fundrise.
Just like with the stock market, a lot of people think
dividends are guaranteed, but companies can stop
paying that dividend or restructure it at any point in time.
We hope they continue to pay dividends,
but it is never guaranteed.
But so far, looking at my return here with Fundrise,
it is very promising.
It's definitely something I'm personally going
to be investing more money into.
Now if we jump over and take a look at the Fundrise website,
we can take a look at the returns over the last five years.
The company pretty much was formed around 2014.
That was the first year that you were able to invest.
We do have a very limited amount of data here.
Like I said, the real test will be when we see
what Fundrise looks like over the course of 10 or 15 years
especially when we have a bad real estate market.
But in 2014, it was a 12.25% return.
2015, 12.42.
What's important to note here
is that this return is net of fees.
Fundrise collects a 1% management fee.
It includes both an asset management fee
and some other fee as well.
But all in, it's a 1% fee.
This is the return after your Fundrise fees.
Sometimes people will look at that and say, "Okay.
"Yeah, you have a 12.25% return.
"But isn't it really 11.25?"
The answer is no.
These returns are net of fees.
This is what you earn as a return
after Fundrise collected that 1% fee.
2016 was their worst year to date at 8.76,
which is still a fantastic return.
2017 came in at 11.44
and 2018 at 9.11%.
Now let's go ahead and answer the question
that pretty much everybody is going to be asking.
What was the return like for Fundrise here
compared to the stock market if you look at the S&P 500?
As we know, 2017 was a fantastic year
and the returns from the stock market
absolutely obliterate the.
Even as good as that 11.44% return was here with Fundrise,
the stock market blew it out of the water.
But in 2018, the return from Fundrise after fees was 9.11%.
Meanwhile, the stock market had a loss of 6.59%.
Really, it beat the S&P 500 by about a 15% return,
which is relatively substantial.
Now if you do include the fact that the S&P 500,
those companies paid dividends,
if you factor in those dividends,
the S&P 500 returned a loss of 4.75%.
But as you can see, in 2018,
which is a very short amount of data,
Fundrise significantly outpaced the S&P 500.
Now I'm definitely not saying
that Fundrise is better than the stock market
or the stock market is better than Fundrise.
Each of these investments I believe has its own purpose.
My goal here is to not have all of my eggs in one basket
and to be diversified across different asset classes.
That is why some people decide to invest
in physical real estate or gold and silver
or maybe peer-to-peer lending or even antiques
because they want to be investing in different asset classes
that do different things at different times.
Maybe in 2018, the stock market had a lousy return,
but Fundrise had a pretty relatively good return here.
You ultimately want to have different assets
that are gonna be moving in different ways
at different times.
Fundrise could be one way of accomplishing that
and getting exposure to private real estate investments.
My return here with Fundrise as you can see here
is about just under 5% so far over the last eight months.
Again, if you compare that to the S&P 500,
it has outpaced the S&P 500.
It's also an investment that is very passive.
I get my emails from Fundrise once in a while
when they add projects and when I get dividends.
But other than that, it's definitely a very passive,
set it and forget it investment.
I do plan on adding some more money to this Fundrise account
and seeing where this goes over the next couple of years.
But anyways, guys, that is my update here
on my small Fundrise investment.
I would love to hear what you guys think
in the comment section below.
Are you a Fundrise investor?
What has your experience been?
If you guys have any specific questions,
drop me a comment down below
and I will do my best to answer.
Like I said, if you guys want to open up a Fundrise account,
the minimum investment is just $500.
It's gonna be the top link in the description below.
That's an affiliate link.
You don't have to use it if you don't want to,
but I certainly appreciate it as it does help me out
and helps to support my channel.
More comprehensive review of Fundrise is down below as well
if you're interested.
But thank you, guys, so much for watching this video.
I will see you in the next one.
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